IOI Corp, Harita Group in Oil Palm Joint Ventures

Malaysia's most valuable plantation firm IOI Corp Bhd said Wednesday (15/8/07) it has agreed to team up with Indonesia's Harita Group to cultivate oil palms in Kalimantan.

The company will spend $130 million to buy a 33% stake in PT Bumitama Guanajaya Agro and a 67% stake in several unnamed companies, which will have total land for planting of 128,000 hectares, IOI said in a filing to the stock exchange, according to Dow Jones Newswires.

Bumitama has a total planted area of 35,340 hectares, unplanted land of 64,000 hectares and three palm oil mills.

IOI said it will provide plantation management and technical support under a technical support agreement while Harita will be responsible for human resource and regulatory matters.

The proposed joint ventures are in line with the company's strategy of growing its core palm oil business, thus providing the opportunity to capitalize on the favorable outlook for the oil palm industry, IOI said.
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